Based in Atlanta, SunTrust like its peers has been benefiting from stronger credit, although its net interest margin--a key measure of lending profitability--has been narrowing amid low short-term interest rates.

For the quarter, the bank's net interest margin narrowed to 3.25% from 3.39% a year earlier and 3.33% in the first quarter.

The provision for credit losses was $146 million in the quarter, down from $300 million a year earlier and $212 million in the prior quarter.

Net charge-offs, or loans lenders don't think are collectible, were 0.59% from 1.14% a year ago and 0.76% in the first quarter

"Improving economic conditions are now starting to create a more favorable operating environment," Chief Executive William H. Rogers said on Friday.

SunTrust reported a profit of $377 million, compared with a year-earlier profit of $275 million. Per-share earnings, reflecting the payment of preferred dividends, were 68 cents compared with 50 cents a year ago.

Mr. Rogers has been cutting costs to offset slow loan growth and low interest rates. Noninterest expense dropped 9.6% to $1.4 billion. The bank also has been shrinking headcount and retail branches as more SunTrust customers conduct their business online or via mobile devices.

Shares closed Thursday at $34.30 and were inactive in recent premarket trading. The stock has risen 42% in the past 12 months.

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